Finance Minister Nirmala Sitharaman will present Budget 2024 in Parliament today. During this period, special announcements can be made for infra and railway sectors. The Finance Minister can make many big announcements in the budget. It is expected that some separate announcement will be made especially for salaried employees. As India’s middle class is eagerly waiting for the Union Budget 2024, Moody’s Analytics has offered a glimpse of hope, saying that something important may happen for them.
Aditi Raman, associate economist at Moody’s Analytics, said in a note that after losing its absolute majority in the Lok Sabha, Prime Minister Narendra Modi’s BJP aims to build trust and public confidence in the new coalition government. In India’s budget preview, Moody’s Analytics said the budget will have an impact on business and consumer confidence.
This Union Budget of India will maintain capital expenditure on infrastructure or possibly increase funds for production linked incentive schemes. There are likely to be some different announcements for taxation in the budget, but in view of the surprise result in this year’s general elections, there will be a broad emphasis on policy continuity.
What can be special for the middle class?
The middle class expects that tax rates will reduce and the basic exemption limit will increase. At present, the basic exemption limit under the old tax regime is Rs 2.5 lakh and under the new tax regime it is Rs 3 lakh. It is expected that under the new system the limit can be increased to Rs 5 lakh. According to Mayank Mohanka, Founder-Director, Taxaram India, such a step will not have any significant impact on tax revenue, but those in high tax slabs can save a lot.
New tax slab may be introduced
Apart from increasing the standard deduction, many taxation and finance experts are advocating the introduction of a separate tax slab for income between Rs 15-20 lakh. Currently, income up to Rs 15 lakh is taxed at 20 per cent and income above Rs 15 lakh is taxed at 30 per cent. The new tax slab of 25 percent may be more balanced.
What will be the announcements on HRA?
A major demand is to include House Rent Allowance (HRA) and home loan interest tax benefits in the new tax regime. People were getting these benefits under the old system and with their inclusion in the new system, more taxpayers can be encouraged to make changes.
From 2018-19, long term capital gains (LTCG) of more than Rs 1 lakh on equity shares or mutual fund units attract 10 percent tax. Keeping in mind the current economic environment, finance experts suggest increasing this limit to Rs 2 lakh.
There is also a possibility that the government may redefine futures and options (F&O) trading as speculative trading. This change will limit the ability to set off F&O losses against other income, a move aimed at preventing excessive retail participation in this sector.